| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 957020 | Journal of Economic Theory | 2014 | 15 Pages |
Abstract
The paper identifies a necessary and sufficient condition for a deterministic local optimum to be locally improved upon by a stochastic deviation. When this condition is satisfied, a method to construct the stochastic allocations that increase the objective is provided. This technique is applied to a number of adverse selection and moral hazard problems.
Keywords
Related Topics
Social Sciences and Humanities
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Economics and Econometrics
Authors
Stéphane Gauthier, Guy Laroque,